All four major indexes we cover rallied modestly from Monday’s Losses, but none fully retraced all of negativity. While S&P 500 eked out new short to intermediate high via intraday action, S&P’s closing level was not a new closing high.

Trading volume rose 10% compared to Mondays levels.

All trends remain positive on Minor, Intermediate and Major Cycles, but all are also historically “Overbought.”

Daily MAAD recovered all of Monday’s losses Tuesday and scratched out a slightly higher and new short-term high and moved to best level since December 28 short-term low. Seventeen issues were positive with 3 negative. Daily MAAD Ratio was marginally “Overbought” at 1.24.

Daily CPFL was positive Monday and moved to new short to intermediate-term high. Daily CPFL Ratio was moderately “Overbought” at 1.70.

Trend under way since November lows in all of major indexes may be toward endgame given “Overbought” conditions and simple fact prices cannot continue higher indefinitely without some retrenching.

Monday’s reversal of last Friday’s gains to new short-term highs is suggestion sellers remain just above current bids near major resistance levels.

Short-term measured move target toward 1510 has been “teased” over past six sessions and has held to suggest Minor Cycle could be near termination phase and upside goals.

If move since November lows turns out to be A-B-C rally with “B” leg pullback from December 19 to January 2, “C” leg rally could be ending.

Longer-term lingering weakness in MAAD, CPFL, Cumulative Volume, and Momentum, is an indication market could be on borrowed time. Nothing but new highs by all our key indicators, an unlikely event, would erase negative divergence.

Index

Daily / Weekly / Monthly Stops

Weekly

Monthly

2/4

2/5

2/6

2/7

2/8

2/8

2/28

S&P 500 Index

SELL1485.71

SELL1489.05

SELL1492.17

SELL1494.02

SELL1495.59

SELL1395.00

SELL1330.62

Dow Jones Industrials

SELL13702.83

SELL13749.07

SELL13790.75

SELL13817.61

SELL13837.35

SELL12903.12

SELL12570.95

NASDAQ Composite

SELL3130.09

SELL3132.01

SELL3133.89

SELL3135.18

SELL3137.22

SELL2941.35

SELL2862.45

Value Line Index

SELL3339.86

SELL3349.75

SELL3355.06

SELL3358.91

SELL3364.69

SELL3411.65

SELL2817.27

Note: Stop levels, a function of the extant trend, are based on the trailing moving average price channels for the Highs or the Lows of an index. Whether or not a specific index is suggesting a “Buy” or Sell” is determined by whether or not index prices are above or below the current channel Stop levels. Stop levels should only be used as an entry or exit guide and in conjunction with other market entry and exit strategies.